mortgage term expires in 1.5 years - what to do?

economic

Hi

my mortgage term expires in 1.5 years. i am looking to quit my job in the next few months and effectively retire (although will be doing various things to keep me busy). the big problem is i have a mortgage and whilst i would be able to meet my mortgage payments easily even without a job, my mortgage term expires in 1.5 years and would need to remortgage then. obviously by then i will not have a job so what do i do?

i want to keep the mortgage and dont think it makes sense to pay it all off. was wondering if i should do anything now or in 1.5 yrs to avoid this problem? remortgaging now would incur early repayment charge that i do not want to pay (£3-4k).

thanks

hazyjo

Do you mean your mortgage deal expires? Not sure why you'd need to remortgage if the whole thing ends.


Are you effectively paying to borrow money that you already have? Without knowing how much remains on your mortgage and what you have in the bank, it's hard to comment...


Jx

HappyMJ

economic wrote: »

Hi

my mortgage term expires in 1.5 years. i am looking to quit my job in the next few months and effectively retire (although will be doing various things to keep me busy). the big problem is i have a mortgage and whilst i would be able to meet my mortgage payments easily even without a job, my mortgage term expires in 1.5 years and would need to remortgage then. obviously by then i will not have a job so what do i do?

i want to keep the mortgage and dont think it makes sense to pay it all off. was wondering if i should do anything now or in 1.5 yrs to avoid this problem? remortgaging now would incur early repayment charge that i do not want to pay (£3-4k).

thanks

You don't need to remortgage. The deal will go on to the banks standard variable rate. Your paperwork would have referred to this.

You can remortgage if you like and use your pension income to prove you can afford the mortgage. I would assume as you are retiring you are going to have enough money to afford to live and pay the mortgage for some time.

marksoton

It doesn't expire it simply goes to the SVR.

I'm assuming you want a better rate than that in which case the LTV will be important as will your ability to prove affordability.

economic

ok, thanks

i would want to get onto another deal as the SVR would be very high. i am only 33 so wont be abe to draw on any pension. ill be relying purely on savings and investments. does this mean i will have to have a job then to get back onto a deal?

the mortgage amount is £220k. im paying £700 a month and receive same amount from my lodger.

hazyjo

Do the investments pay a lifelong set amount or do they end during the mortgage term?


Savings obviously will only last for so long.


If you can prove it's a regular guaranteed income for the mortgage term, great - but I'm doubtful...




Jx

economic

its just dividend income and interest on savings. what about the fact i have a lodger?

Thrugelmir

No account will taken of income from that source. If you want to retire early focus on paying down the debt owed.

knightstyle

This is exactly the position we were in a few years ago when I was made redundant, just asked the lender to go to interest only when the deal expired, not before. That was 20 years ago and we still have the mortgage, standard rate and have paid a bit off the capital, I am now over 70 and doubt if I will ever pay it all off, not worried though with these low interest rates.

Jhoney_2

You just take a new deal with your lender, it's called a retention product and can often be done online with a few minor pieces of information.

You do not need to declare your employment status or go through affordibility checks. The word remortgage is actually when you move lender. It often gets used to mean exactly the opposite.

Im thinking you meant a new product and term e.g 3/5 year fix, tracker etc with your current lender?

agrinnall

If you feel you can retire at 33 then presumably the value of your savings and investments is high enough to ensure you can live on the income from them at an acceptable level at least until you start to receive pension income, if there is any (you won't be due a lot of state pension with only a few years contributions). Perhaps it would be better to use some of that capital to pay off your mortgage now rather than use it up in the future paying mortgage interest.